So, you’re wondering where to buy stocks online. Maybe you’re looking to make the switch from a flesh-and-blood broker. That makes sense — flesh-and-blood brokers might be so-named because they’re human… or because they extract about a pound of the stuff on each trade.

Or maybe you’re looking to buy your first stock and curious about where to buy stocks generally.

This can feel sorta overwhelming. For one thing, there are at least three dozen online brokers, probably more. And, for another, you’re forced to grapple with word salad levels of new vocabulary.

There’s this saying on Wall Street, “What everyone knows isn’t worth knowing.” But I think a more cynical rendition is more accurate — “Know-nothing clients are the one’s worth knowing.” The less you know, the more commissions your vampire, er, I mean broker, can bleed out of you.

The less you know, the better off they are.

Like Ben Franklin said, “An investment in knowledge pays the best interest.” So in pursuit of that goal, I put together the following comparison matrix. The idea here is to take the same level of neurotic research that I did before picking my own online broker and make it 1) more visually friendly and 2) more rigorous.

If you just want to read my final recommendation, scroll down to the end.

Where To Buy Stocks Online: My Final Recommendation

This is my online broker and the one that I recommend to all of my friends, and the one that I myself use.

The reason?

Fees.

Think about it: when you trade a stock on Scottrade or TradeKing, the same stuff happens. Scottrade doesn’t have some special juice, some kind of je ne sais quoi. Their services are identical.

Online brokers a commodity. You want to go with whatever is cheapest. It’s like buying gasoline.

And small differences in cost per trade add up over time. They become substantial.

If you make only 20 trades per year, with TradeKing, that will cost you about ~100 dollars. With the most expensive option, E*Trade, those exact trades will cost you 200 dollars.

The gap widens over time.

Oh, and the reason I chose TradeKing over the other low-cost brokers, like TradeMonster, is that TradeKing has no account minimum. If you’re not looking to invest tens of thousands of dollars with a right now, for TradeKing, that’s no problem.

Alright — so you want to take the plunge into the world of online brokers. You want to buy shares online. No problem.

This was a predicament that I was in not too long ago, so I’m well positioned to help you out.

In pursuit of that goal, I’ve written up the following step-by-step guide. If you follow along to the end, you’ll have 1) signed up to an online broker and 2) successfully executed your first online trade. After that, the world is yours for the conquering.

Let’s get to it, then.

Pinpointing The Best Online Broker: TradeKing

There are two types of people in this world: satifiscers and maximizers. When a satifiscer goes to the store to buy a blanket, they’re looking for one that is good enough. When a maximizer buys a blanket, they want the best one. Troublingly, satisficers tend to be happier.

I saw “troublingly” because I’m an unabashed maximizer. If it’s not the core of my personality, it’s close. I have to look at every option and pick the best for money. It’s a compulsion. Maybe I’d be happier without it, but I can’t stop.

The implication: Before I chose an online broker for my money, I did research. A lot of research. I’m talking Woody Allen levels of neurosis here.

Now you get to benefit from my neuroticism.

There was one metric that I was really concerned with: trading costs. If you’ve been following the site for a while, you know that I hate fees. They are, if not the devil, a member of his inner sanctum. Over the long run, when it comes to investing, fees can cost you hundreds of thousands of dollars. Whisked away, out of your pocket, and into those of some fat cat, financial guru somewhere.

Think of it this way: Imagine that you go to buy a stock. You’re going to invest 500 dollars in this company. With a real life broker, one you call over the phone, it might cost you $50 or more.

That means that you’ve just lost 10% of your money. In a year, if your investment does well and is up by 11%, you’ll only be breaking even.

The more trades you make, the more this fee is magnified.

If you sign up with E*Trade, it’ll cost you $10 per trade. With a low-cost broker, like TradeKing — my ultimate choice — trades are less than half that: $4.95.

I ended up choosing “individual account” here. You can always change it later — TradeKing allows you to have multiple types of account unified behind one main login.

The usual stuff here. Address, that kind of thing — you’ll need your social security number, so have that ready if you haven’t memorized it.

This dialogue just asks questions about earnings, tax brackets, and trading experience. The blurb at the top mentions that they have to ask for this, because regulation.

Almost finished. Here you can apply for a margin and option account — I didn’t, they have substantial, federally-regulated account minimums.

Now you just have to agree to the usual disclaimers and the terms of service. I would tell you what is in them, but I have to confess that I didn’t read ’em.

Now you just review your information and then give it your electronic John Hancock.

The process says this is ostensibly an application, but my account was approved instantly, with any human approval. This is in contrast to ally bank, where the application eventually forced me to call their staff, after which I later received a rejection letter. So, yeah. Fuck ally bank.

But that’s it. Now the account is set up, and you just need to transfer funds to it.

Transferring Funds

When you first log in, you’ll be created with a dialogue like this:

I chose “transfer money online.” I have some assets I need to transfer from another broker to TradeKing, but that involves paperwork, so I’m procrastinating.

After you click that, you’ll have a dialogue where you need to enter your bank’s routing number and your checking account number. Both of these can be found at the bottom of any check associated with that account:

Once that’s done, TradeKing will demand a picture of one of your checks and of your photo ID:

I used my webcam to take photos of both of these. You have to navigate to Client Services &gt; Forms &gt; Upload a form in order to upload those images to TradeKing.

And then you have to wait until they process those documents. They say it should be done within two business days. I filled all of this out on a Saturday and it was done by Monday morning.

What The Online Research Tools Look Like

During your wait for your funds to transfer, you’re probably going to want to poke around the site. I’m two steps (at least) ahead of you.

Here’s the main screen when you pull up a stock:

There’s a lot to like here.

Pros of the main chart: looks appealing and you can zoom in to different timescales, along with an indicator of trading volume.

Cons of the main chart: technical analysis is useless so you can’t determine whether or not to buy based on it alone.

Favorite part of this view: Over on the sidebar, important financial information is highlighted.

If you like what you see, you’re probably going to want to dig in further still. Not a problem:

The view of financials here is on par with Google Finance, which was my preferred tool before switching to TradeKing. You can also click through on the sidebar to read any of the company’s SEC filings — stuff like the last 10k. Reading enough of those will teach you more about business than any MBA program.

You can click through at the top to view the corporation’s balance sheet and cash flows.

On the other hand, if you’re that strange breed who believes in technical analysis, TradeKing has built its own, free-to-use platform tailored for you:

Finally, one of the more interesting available views, you can see what a company’s insiders — CEO, director, etc — are up to. Have they been buying? Selling off?

TradeKing also has a stock screener, but I found it sort of impoverished: PE to growth is my favorite metric, and not available. So instead I’m sticking with the best free screener, FinViz.

There’s a lot more than this available, but I’ll let you explore on your own. By now, your funds ought to be available, which means that you can now actually, you know, buy shares online.

Executing Your First Trade

Actually purchasing shares of a stock, thanks to modern technology, is monstrously easy. It ought to be, given that this is where platforms like TradeKing make their money — the more you trade, the more they make. Sort of like how Amazon implemented one-click purchases to make impulse buying a breeze.

To purchase a share, you first need to navigate to the trading view. To do so, click Trading > Order Status > Regular Hours Trading.

This will take you to the trading view, where you can execute a buy or sell order.

As you can see in the screenshot above, I’ve funded my account with a lavish 20 dollars, and for the purpose of this demo, I’m buying one share of AFOP. (Note that it is usually a bad idea to buy only one share of a stock.) With a market cap around 240 million, these shares can sometimes be pretty thinly traded, so I’m using a limit order. I’m basically saying: I’ll buy at $13 dollars or less, but no higher.

This is in contrast to a more standard market order, which says “buy at whatever price available.” That’s a fine option on giant stocks, like Apple or Microsoft, but dangerous on smaller ones.

Once that’s done, you click “Preview Order,” which brings you to…

If everything passes your inspection, you click “Place Order,” and that’s it! Your order will be executed as soon as possible.

Final Thoughts

So, what are you waiting for? Stop procrastinating and put that money to work. 1 percent of trading days account for 95% of all gains.

Want to know the highest money market rate? It’s ableBanking, at 1.02% yield. There is a 1 dollar minimum balance.

This is everything that you need to know, but that doesn’t mean that it’s everything I can tell you! Far from it. Let me tell you a little more about ableBanking.

It’s a division of NorthEast bank, a Maine-based bank that was founded way back in 1872. NorthEast bank boasts some 200 employees but, based on counting people in ableBanking’s public photo, ableBaking is run by about 9 people.

How can you run a bank on only 9 people? Hey, that brings me to my next point: ableBanking is one of these new, tech-forward banking companies, like ally. They’re able to offer high-yields relative to everyone else by running very lean operations. ableBanking has no traditional, brick-and-mortar, out-there-in-real-and-not-cyberspace branches.

Another way that they’re able to offer this sort of yield, at least if you can believe their published propaganda, I mean, informational materials, is that “Customers would be happier if we spent more money on them and their communities than on costly advertising.”

This is 100% true. Customers of every business would be happier if more money was spent on them and less on advertising. But every business owner everywhere would prefer spending less on both customers and advertising, ceteris paribus.

But acquiring new customers is the lifeblood of a company. Otherwise, no revenue, no salary, no employees, no services, no company. And how do you acquire these new customers? With advertising.